Stores Take Cautious Course in Perplexing B-t-s Season

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What if there is no going back-to-schools this fall?

Retailers fret the potential impact on business, apparel sales in particular, and are being challenged like never before to manage their marketing, ordering and inventories in an economic climate of extreme uncertainty. Pressures are mounting in a season where coronavirus cases continue to spike in many states, unemployment remains high and politics are depressingly divisive.

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Doug Howe, chief merchandising officer for Kohl’s, said the situation for back-to-school is “fluid, and we are planning into scenarios and will adjust accordingly based on where we see consumer demand. The team is being agile and flexible, with some opportunity to chase goods based on customer response throughout the season.”

Kohl’s marketing promotes “heading back or logging in,” and singles out jeans, sneakers, backpacks and other essentials from brands including Adidas, Lee, Levi’s, Nike, Under Armour and Vans.

“Fall learning will look and feel very different this year and families are balancing a lot,” said Jill Sando, Target’s executive vice president and chief merchandising officer, style, and owned brands. “We want our guests to know that we’re here for them, no matter what.”

This season, Target has extended from one week to six weeks its Teacher Prep event, which offers educators of students in kindergarten through high school 15 percent off classroom supplies. College students can receive a $5 off coupon by spending $20 in stores or online.

“Back-to-school will certainly look different than what we are used to, and will vary by country, state and city,” said a spokesperson for Abercrombie & Fitch. “For two of our brands, abercrombie kids and Hollister, we know our customer is still physically growing and there is a need for new apparel. When schools and our stores were closed in the spring, we still saw demand on our digital channels, which was up 25 percent in Q1. Whatever b-t-s may look like, we will continue to meet our customers where they are, connecting with them through social media, digital channels and in stores when we can.”

The b-t-s campaign at Hollister, a division of Abercrombie & Fitch, features TikTok stars Charli and Dixie D’Amelio and Noah Pugliano themed around positivity and building confidence in teens, the company said. Additionally, Hollister recently released its “Volume On” series platform where teens on Hollister’s Instagram discuss topics such as racial equality, LGBTQ Pride, anti-bullying and mental wellness. “In terms of products, customers are responding well to soft and cozy, as well as fashion items. We are flexing our marketing and inventory buys to reflect our customers new reality and they are responding.”

Generally, retailers contacted by WWD over the past week echoed that the key to navigating their businesses through the coronavirus is agility, leaner inventories,  chasing orders in categories and items seeing growing demand, safeguarding employees and shoppers against the virus, convenience, and relevant and fresh messaging to consumers. Retailers canceled many orders placed prior to the coronavirus outbreak, leaving manufacturers holding goods that could be available to stores relatively quickly if there’s a pickup in consumer demand.

Not surprisingly, their attitudes in the face of adversity were positive.

“We don’t know exactly how back-to-school will play out, but we know we remain relevant to the kids,” Chad Kessler, global brand president for American Eagle, told WWD.

Vendors were less positive.

As one large apparel supplier to national retailers said, “Basically, right now, a lot of chains are seeing buy-now wear-now stuff selling — shorts and Ts for kids, summer things. Kids grow so they need stuff. But the big question is to what degree stores transition to long-sleeve, long-leg merchandise, and typically that’s about uniforms, jeans, pants, hoodies, fleece as parents get their children ready for cooler months and into winter. Usually stores make the conversion by August.

“As a fail safe,” the vendor added, “retailers are going heavy into kids activewear, which kids wear at school and at home. It looks like the percentage of pants might be less,” as retailers put more of their dollars into active. They’re also spending significantly for the first time on face masks and neck gaiters, the source said.

“A lot of things haven’t been decided, and some retailers are pushing things further out into the future,” the vendor said. “This year will be another year where the season starts even later. How back-to-school plays out is a real unknown right now, but we have been shipping. Some retailers are planning as if schools will be opening on time, but I don’t know anybody who is planning an increase, specifically in kids. There’s less money out there to spend on kids, but whatever parents have, they’ll spend on their kids first rather than themselves.”

“Backpacks have always been big for back-to-school but so far it’s been a big dud,” said another supplier. “Apparel sales once stores reopened were good,” he added, suggesting some pent-up demand for summer merchandise. As far as purchasing any fall b-t-s merchandise, “people are waiting to see what happens with the schools.”

“There’s talk about an unprecedented spend for back-to-school but it’s in tech — parents having to buy all this technological equipment for their kids — computers, headphones and speakers, which is more expensive,” said one industry expert. “With the apparel part, there is a lot of pressure on retailers. The need for back-to-school apparel — jeans, uniforms, backpacks — is not going to be anywhere near the demand we have seen in the past. Consumers will still want activewear, but It’s really going to be tough from now until after Labor Day. In September, things could change.”

Despite President Trump threatening to withdraw federal funds from schools that do not open this fall, many cities and states have put the brakes on restarting. California Gov. Gavin Newsom said last week that schools and campuses in 32 counties don’t meet the criteria necessary to reopen, a decision that impacts some 5 million students.

In Florida, Gov. Ron DeSantis has ruled that all public K-12 schools will reopen. That led to a lawsuit Monday by the state’s teacher’s union. In Texas, another hot spot for the coronavirus, schools have been ordered to reopen by four weeks into the school year.

Many other states, including New Jersey and North Carolina, are advocating a hybrid model of classroom and remote learning. New York is leaving the decision up to the individual school districts if they meet certain criteria and Connecticut and Delaware have yet to make a decision.

Around the world, 60 percent of schools across 186 countries and territories were closed as the pandemic began, forcing 1.5 billion students to stay home, according to Time magazine. And the Centers for Disease Control and Prevention warns that in-person classes and events are likely to further spread the disease.

Retailers selling nonessential merchandise have been hammered by months of forced closures. The back-to-school season for many stores is second only to holiday in terms of sales. A devastating season can push them over the edge.

Still, the National Retail Federation is projecting record spending of $101.6 billion this year, up from $80.7 billion in 2019, though NRF did indicate that sales of laptops and other computer accessories facilitating online learning are pushing the numbers up.

“By any measure, this is an unprecedented year with great uncertainty, including how students will get their education this fall whether they are in kindergarten or college,” said NRF president and chief executive officer Matthew Shay. “Most parents don’t know whether their children will be sitting in a classroom or in front of a computer in the dining room, or a combination of the two. But they do know the value of an education and are navigating uncertainty and unknowns so that students are prepared.”

According to NRF’s survey, families with children in elementary school through high school indicated they plan to spend $789.49, or $33.9 billion, up from the $696.70, or $26.2 billion, they said they would spend last year. College students and their families are projecting to spend an average of $1,059 per family this year, or a total of $67.7 billion, up from $977, or $54.5 billion, last year.

With 55 percent of shoppers surveyed expecting students to attend some or all classes online, computers, home furnishings, headphones and accessories, such as printers, top their shopping lists. Spending on apparel is projected to be down only slightly to $234.48 from $239.82 last year. And in all categories, much of the spending is projected to be online.

Deloitte found that 66 percent of parents nationally are anxious about sending their kids back to school this year and 51 percent expect to spend more on virtual-learning tools because they’re worried their kids will fall behind with at-home learning. This will come at the expense of apparel and school supplies.

Against that backdrop, some retailers continue to be aggressive with their approach to b-t-s. “It’s definitely an important season for us from a volume point of view,” said American Eagle’s Kessler. The teen chain always launches new jeans each year and this year is no exception. A campaign launching this week centers around two new stretch jeans for men and women.

Kessler said despite taking a hit when AEO’s stores were temporarily closed, the decision was made to “deliver back-to-school as we always have. We never took our foot off the pedal in delivering our assortment. We will offer the same amount of newness in our jeans and the rest of our assortment to make great outfits if kids are studying at home or at schools.”

He said American Eagle has reopened more than 900 stores, nearly the entire fleet, and consumers started to visit with back-to-school on their mind. Kessler said the retailer planned its inventory levels “more conservatively than last year and to our original Q3 plan, but we have the ability to flex up and down depending upon the appetite.” When the stores were closed, strength in digital sales “really exceeded anything we’d seen prior.”

Howe at Kohl’s said, “What families need for the back-to-school season differs by household, no matter what the year brings. As a destination for the active and casual lifestyle, our customers look to Kohl’s to get them ready for back-to-school whether in or out of the classroom, especially in categories like activewear, apparel basics and sneakers, which kids need as they grow. Families are also spending more time at home, and we are offering educational toys, desk accessories and technology categories.”

Walmart also adjusted its back-to-school approach due to COVID-19. The company said, “In addition to offering favorite back-to-school essentials on the list year-after-year, we’ve made sure to stock up on items that will help teachers and students who continue to learn from home, including office furniture and electronics. And because safety is always top-of-mind, we have also stocked up on items like hand sanitizer, masks and disinfecting wipes.”

The retailer is partnering with brands such as, PBS Kids, Disney, Crayola and Sylvan Learning to offer workbooks and online content to help kids learn from home. Walmart’s web site will feature video content, learning resources, workbooks, lessons and activities for kids, and the company has stocked up on laptops and tablets as well as home office products, furniture and decor “to help make virtual learning productive, comfortable and fun,” a spokesperson said. Walmart’s hot sellers so far this season include Crayola Colors of the World crayons, a new line designed to reflect multiple skin tones, and phone sanitizers and aroma diffusers by PhoneSpa, seen as popular among college students.

Jordan Edwards, ceo and president of Mixology Clothing Co., a 10-unit specialty chain in the New York tri-state area, discussed the uncertainty of kids going back to school and the impact on business. “We’re trying to figure that out right now. So many vendors are backed up. The supply chains are so funky right now. All of our buys for the contemporary side of the business are up in the air. The long and short of it is: back-to-school is our Hanukkah, Christmas and Super Bowl all wrapped up into one.

“Normally it would be incredibly important, especially for the returning college students and the new college students, the freshman class, which is always a big driver of being wardrobed,” he said. “Now we’re trying to figure out what that’s going to look like. It might not have the sugar high of the back-to-school season. But with nobody traveling, with no kids in college, with people at home, they’re coming into the store more,” he said.

“With the malls closed, and the city basically shut down, our New York store [on Third Avenue and 81st Street] is doing nothing. Our customer is in the Hamptons where our store is doing better than ever. We actually opened a second store, a pop-up in Westhampton. The Hamptons has never been this busy or this full.”

For the season, Edwards said comfortable clothes, matching sets and tie dye are trending. Top brands include Jac Parker private label, Z Supply, ath-leisure from Koral and Beyond Yoga, and jeans from Levi’s Flying Monkey and Black.

Because of the uncertainty this year, Edwards believes it will take six to eight weeks to do the volume the retailer would have done in two to three weeks in years past. “A lot of people will be home, I don’t think they’ll feel the rush to get back to campuses, but they’ll still want to take advantage of the changing seasons and the back-to-school mentality.”

He said last week would normally mark a transition to pre-fall, but that season is at least two to three weeks delayed because of the supply chain delays in China and Los Angeles.

“Like most stores, we’re sitting with a large amount of spring and summer inventory from right before we closed, when we were at a peak getting ready for our spring season to begin,” said Perry Schorr, president of Lester’s, a three-unit retailer in Manhattan and Greenvale and Rye Brook, N.Y. with an assortment ranging from babies up to young career women. “For the most part, it went untouched for three months or so. It’s desirable inventory, customers are coming in and buying it. A lot of it is promotional at this point. People are looking for summer. The furthest thing from their mind is back-to-school,” he said.

Despite what happens with schools and colleges reopening, Schorr said, “Our expectation is that they will still come and shop. It won’t be as much as a priority or rush to come in, but people will still shop. We’re taking a relatively conservative approach.

“July has been good. There’s been a lot of pent-up demand. They’re definitely looking for promotions, and they’re taking advantage of it. They’re looking to shop and fill in their wardrobes for the beach and the pool and hanging out,” he said, echoing other sources also indicating the “buy-now-wear-now” character of what’s currently being purchased.

“At this point, sweatshirts, sweatpants and leggings continue to be the products that are driving sales,” said Jill Oralevich, division merchandise manager of Lester’s. “I still think it’s a little bit early [for back-to-school]. What’s been successful is cozy/comfy.”

Meg Strader, founder of the Simply Megs women’s contemporary clothing boutique in Greensboro, N.C., said, “We have a huge back-to-school business. We dress tons of girls, especially for rush and going back to college.” She said she placed fall orders “cautiously” with her top 10 vendors, including Bella Dahl, Crosby, Lilla P and Marie Oliver, worried that the state might be shut down. “They all have essentials that they stock. I figure I could get my hands on product if I need some,” she said.

She noted that every college in the area has different requirements for sorority rushes, such as dresses, solids and white. She said the colleges haven’t revealed what they’re doing and as a result, the store is in limbo. If rush is going to be Zoom, for example, the girls will only need tops. And for a shop that prides itself on outfitting college girls, “It will definitely be a blow. We pride ourselves on selling looks from top to bottom, from the accessories, shoes, earrings, to the dress and clutch.”

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